Johansen Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. The Corporation has provided the following estimated costs for the next year:

Direct materials $ 6,000
Direct labor $ 20,000
Rent on factory building $ 15,000
Sales salaries $ 25,000
Depreciation on factory equipment $ 8,000
Indirect labor $ 12,000
Production supervisor's salary $ 15,000

Jameson estimates that 20,000 direct labor-hours will be worked during the year. The predetermined overhead rate per hour will be:

Question

Johansen Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. The Corporation has provided the following estimated costs for the next year:

Direct materials	$ 6,000
Direct labor	$ 20,000
Rent on factory building	$ 15,000
Sales salaries	$ 25,000
Depreciation on factory equipment	$ 8,000
Indirect labor	$ 12,000
Production supervisor's salary	$ 15,000

Jameson estimates that 20,000 direct labor-hours will be worked during the year. The predetermined overhead rate per hour will be:

BlackTom AI · Accepted Answer

Predetermined overhead rate equals estimated total manufacturing overhead divided by the estimated allocation base (direct labor-hours).

1. Relevant knowledge points and concepts
- Manufacturing overhead (MOH) includes all factory-related costs except direct materials and direct labor: examples are factory rent, depreciation on factory equipment, indirect labor, and production supervisor’s salary.
- Selling and administrative costs (e.g., sales salaries) are nonmanufacturing and excluded from MOH.
- Predetermined overhead rate = Estimated total MOH / Estimated total allocation base (direct labor-hours).

2. Step-by-step reasoning
- Identify which estimated costs are MOH and which are not.
  - Direct materials ($6,000): direct cost -> exclude from MOH.
  - Direct labor ($20,000): direct cost -> exclude from MOH (not part of MOH).
  - Rent on factory building ($15,000): factory cost -> include in MOH.
  - Sales salaries ($25,000): selling expense -> exclude from MOH.
  - Depreciation on factory equipment ($8,000): factory cost -> include in MOH.
  - Indirect labor ($12,000): factory overhead -> include in MOH.
  - Production supervisor's salary ($15,000): factory overhead -> include in MOH.

3. Calculations (all intermediate steps)
- Sum included MOH items: 15,000 + 8,000 + 12,000 + 15,000 = 50,000.
- Estimated direct labor-hours = 20,000.
- Predetermined overhead rate = 50,000 / 20,000 = 2.50 per direct labor-hour.

4. Why the correct answer is correct
- The rate uses only manufacturing overhead items and the given DLH estimate. Using the correct numerator ($50,000 of MOH) and denominator (20,000 DLH) yields $2.50 per direct labor-hour exactly.

5. Why the other options are incorrect
- $2.79, $3.00, and $4.00 per hour result from incorrect inclusion/exclusion of costs or arithmetic mistakes (for example, adding nonmanufacturing selling costs or including direct labor) and do not equal 50,000/20,000. They therefore do not reflect the correct MOH allocation.

6. Conclusion
- The predetermined overhead rate is $2.50 per direct labor-hour, which matches the provided correct answer.

类似问题

PA 2 - What is the predetermined overhead rate if direct labor hours are considered the cost driver?

EA 7 - What was the predetermined overhead rate using direct labor hours?

Which of the following correctly describes the predetermined manufacturing overhead rate?

更多留学生实用工具

智能学习助手

风格化写作助手

论文查重助手

文献引用助手

课堂转译助手

课堂笔记助手

Quiz搜索助手

学校历年真题

智能刷题助手

智能匹配练习

希望你的学习变得更简单